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Greece pp1-24 FINAL 1
25/2/02
4:12 PM
Page 1
GREECE
World Report
A
e
GREECE
This supplement was produced by World Report Limited Inc, who are solely responsible for t
Wi
n n er ’s C
c
i
o
h
This supplement was produced by World Report Limited Inc, who are solely responsible for the content
Greece pp2-3 NEW
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CONTENTS
6 ALL CHANGE
Freed from state dominance,
the banking sector has
been transformed
As the pace hots up for
the Athens 2004 Olympics,
Greece is enjoying a new
confidence and attracting
fresh investment
14 TOURIST ATTRACTION
Promotion, diversification
and privatisation aim to
bring in more visitors
22 GETTING THERE
A series of ambitious
highway schemes is
now under construction
Cover photo: Chris Trotman/Corbis
Printed by Quebecor, Northamptonshire
Reproduction by F. E. Burman, London
This supplement was produced for The
Independent by World Report Limited Inc,
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9 MARCH 2002
2 World Report GREECE
Photo: Athens 2004
T
he next two years are set
to be the most exciting in
Greece’s recent history.
Although the country still
has no common border
with its fellow members of the European
Union, its sense of isolation at the eastern
end of the Mediterranean has faded
into memory.
The last country to qualify to join
the eurozone – and one of the first to
usher it in – Greece is enjoying a new
self-awareness as part of a community in
which it will play an increasingly important role in the years ahead. The smooth
transition from the drachma – one of the
world’s oldest currencies – frees the
government to focus on job creation and
on obtaining real convergence with its
eurozone peers this year.
And then there are the Athens Olympics.
For the Greeks, the 2004 Games represent
an opportunity, which they have grasped
readily, to accelerate development and
promote their country as a magnet for
investment and tourism.
The Greek prime minister, Costas
Simitis, says the country is already reaping
the benefits of hosting the Games in terms
of heightened international prestige,
improved infrastructure and economic
gains. “Greece is already at the centre of
the international spotlight,” he says.
The importance of the Olympics to
the Greek economy was acknowledged
in a cabinet reshuffle late last year, in
which a raft of deputy ministers was
appointed with specific responsibilities
for keeping preparations on track. A
new international programme to attract
foreign investors has been launched
under the appropriate banner, ‘Greece:
A Winner’s Choice’.
The Olympics will have a direct
impact on the economy, especially in the
tourism, construction and industrial
sectors, and will create some 130,000
new jobs. Greece will spend nearly
$43 million this year on international
advertising campaigns to attract tourists.
More than $2.5 million will be spent on
promoting the country in the United
States, and a further $9.2 million on
international television channels CNN,
Euronews and Eurosport.
Finance minister Nikos Christodoulakis
is determined, meanwhile, that the
government will not stall on introducing
structural reform. He says his ministry’s
initiatives are aimed at setting Greece’s
economy on a faster growth track and creating stronger business units. “Structural
reforms will go ahead,” he says. “They are
Going
the economy’s oxygen, especially now
after the introduction of the euro.
“In 2002 the attempt to obtain real
convergence and create jobs will have
top priority. We will cover the gap that
separates us – in terms of growth and
per capita income – from other eurozone
members.”
The minister forecasts Greece’s economic growth for 2002 at double that of
the eurozone as a whole, despite the
current slowdown in the global economy.
Growth for 2002
forecast at twice
eurozone figure
He says that if Greek gross domestic
product (GDP) growth outperforms the
eurozone by two per cent for the next
four to five years, then per capita income
will reach 80 to 85 per cent of the eurozone average.
“Greece is among the few countries that,
while achieving nominal convergence, are
also achieving real convergence,” he says.
“2001 ended with growth of 4.1 per cent,
placing a goal of 3.8 per cent for 2002,
despite the fact that international conditions last year have produced a slowdown
in economic growth.”
The forecast is for growth of four per
cent in 2003 to 2004, after this year’s
expected 3.8 per cent. Unemployment is
forecast to fall to 9.8 per cent in 2003,
from 10.9 per cent in 2001. Inflation is
forecast to decelerate sharply from the
spring until the end of this year at an
average rate lower than last year’s level
of 3.4 per cent.
EU finance ministers last month
approved Greece’s stability plan for 20012004, which was updated at the end of
last year. Greece also stands to benefit this
year from the EU’s third Community
Support Framework (CSF), which is
estimated to account for about one-third
of the country’s predicted growth.
Another third is expected to come from
public investment expenditure.
The government has affirmed its commitment to liberalisation and privatisation, despite recent setbacks such as the
collapse of the merger between the statecontrolled National Bank of Greece and
Alpha Bank and difficulties with the sale
of national airline Olympic Airways.
Lucas Papademos, governor of the
central bank, believes Greece needs to
Greece pp2-3 NEW
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INTRODUCTION
for gold
step up its competitiveness in order to
improve its standard of living as a
eurozone member. “Clearly, the country
has to make more effort if it really wants
to improve living standards in a fiercely
competitive environment,” he says.
“Structural reform is the most essential
thing now and must be aimed at a more
effective operation of markets and a rise
in competitiveness in the private sector.”
Britain’s ambassador in Athens, David
Madden, says Greece presents huge
MADDEN
‘We are encouraging
UK companies to take
an interest’
opportunities for UK firms. He believes
the message from the Greek authorities
to potential investors is a strong one and
that there is real commitment to tackling
old stumbling blocks such as bureaucracy.
“The Greek government is very committed to economic reform, liberalising
the economy, privatisation and making
the economy more efficient,” he says.
“We have a big programme for encourag-
ing UK companies to take an interest in
Greece, particularly during the Olympics.”
Greece had a one per cent surplus in its
trade balance with the Balkan countries
in 2001, which accounted for about 21
per cent of total annual exports. The government’s ambition is to become the top
investor in Bulgaria, for example. The
first trans-border international trade
centre between the two countries recently
opened at the Kulata checkpoint.
Greece’s status as a valued EU member
is reflected also in its improved relations
with its historic rival, Turkey. Greece’s
geographic location means it will be
pivotal in integrating Turkey and its
neighbours in the Balkans into a stronger
and more secure Europe.
Numerous agreements have been made
between the two countries in recent years,
on subjects such as tourism and the
environment, and last month a memorandum of understanding was signed with
the aim of increasing bilateral trade from
the current $1 billion to $5 billion.
There is also pressure from the EU for
a political solution to the division of
Cyprus, the main barrier to normalisation
of relations. “The timing is right to try
again,” Greek foreign minister George
Papandreou said recently. ■
World Report
GREECE 3
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INVESTMENT
Foreign investors
take a fresh look
at opportunities
major international drive to
attract foreign investors has been
launched by the Hellenic Centre
for Investment (ELKE) in the
run up to the Athens Olympics.
The programme, under the slogan
‘Greece: A Winner’s Choice’, aims to
highlight the country’s competitive
advantages in the period 2002-2004.
Public and private agencies will cooperate
on a variety of initiatives and projects.
Greece needs inward investment to
bolster its economy against the impact of
a global slowdown and reduced state
spending imposed by the government’s
pro-business structural reforms.
The government’s success in bringing
down the rate of inflation and producing
a modest surplus on the budget, and
Greece’s above average economic growth
rate, appears to have produced an upturn
in overseas investor interest. During the
first eight months of last year, foreign
direct investment rose to $880 million.
In comparison, outward investment by
Greek companies last year totalled $500
million, reversing the pattern of recent
years in which the country invested more
abroad than it received.
ELKE general manager Haris Issaias
emphasises the country’s stable economy,
full access to the EU markets and strategic
location close to the emerging markets of
southeast Europe and Turkey.
“Membership of the eurozone is a plus
for Greece because it provides stability
in the macroeconomic variables such as
growth of gross domestic product, inflation and interest rates, and these are
important to investors,” he says. “The
eurozone is a factor that will make foreign investors come to Greece who might
not have otherwise.”
Foreign investors have cited a complex
bureaucracy, complicated tax regulations
and protective labour laws as reasons for
being wary of doing business in Greece in
the past. Today, however, government
officials are becoming much more aware
of the need to be investor-friendly.
Mr Issaias says: “Our mission is to promote Greece as a country for investment.
We are trying to encourage cooperation
between Greek and foreign companies.”
He acknowledges that administrative
A
procedures involved in getting an investment project off the ground in Greece
can be time-consuming and complicated,
but adds that the purpose of his agency is
to find solutions.
“We have set up a unit to provide
support for investors in two ways,” he
says. “First, we guide them in terms of
what they should do, and how to deal
with delays or any lack of cooperation.
“Second, after an investment has been
approved, we have the right to intervene
on behalf of the investor with the appropriate authorities in order to solve any
problems they may have in implementing
the project.”
Costas Bakouris was appointed
ELKE’s chairman last year with the brief
of making Greece more attractive to
investors. “We are creating a country that
is going to become more friendly
towards business, which will have all the
elements it needs to compete effectively
in the marketplace,” he says.
“We are making changes in order to be
more competitive and to profit from
investments. The government needs to be
Greek firms have
invested heavily
in the Balkans
less bureaucratic and have fewer rules in
order to be more flexible and more
effective.”
ELKE, funded jointly by the EU and
the Greek government, is a ‘one-stop
shop’ for foreign investors and offers its
services free of charge. It is empowered
to make recommendations to government concerning investment laws and
other business procedures.
“We examine those areas that are not
very competitive and propose changes to
the appropriate ministers in order to
overcome this problem and to focus on
improving those sectors,” says Mr
Bakouris. “The operating climate is
improving and we’re getting many more
enquiries.”
A significant initiative of the ‘Winner’s
Choice’ promotion is Athens Business
Photos: Mark Henley/Impact and Robert Francis/Hutchison Library
Cutting red tape and inflation has drawn inward investment
of nearly $900 million in the first eight months of last year
Open for business: there are a wealth of openings for foreign companies in areas such as tourism, agr ic
Club, which aims to attract some
25,000 members from around the world.
Its website (www.athensbusinessclub.gr)
offers users a wide range of information
on opportunities.
Privatisation of state companies and
liberalisation of the markets in which they
previously enjoyed monopolies have
created a new climate for inward investment. Banking, energy, air transport,
infrastructure projects and agriculture are
all areas offering opportunities.
Access to European technology research
and development funds is one of the
advantages on offer and ITC (information
technology and telecommunications) is
another sector being strongly promoted.
The telecoms sector has been
deregulated and opened up further to
competition, and the government is now
moving towards allowing private investors
to build, own and operate electricity
generation, transmission and distribution
projects in Greece.
Adequate infrastructure is a prerequisite for Greece becoming more
competitive. This is why so much has
been invested in improving its infrastructure networks during the past decade,
not least of all in an attempt to increase
its appeal to potential investors.
Long recognised as one of the
world’s favourite holiday destinations,
Greece’s climate gives it a natural advantage. Better transport facilities open the
way for this to be exploited further.
“With new infrastructure, such as roads
and airports, our country will become
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INVESTMENT
Photo: Corinth Pipeworks
Manufacturers bid to boost profits
via acquisitions and higher sales
gr iculture and infrastructure
much more accessible to visitors,” says
Mr Bakouris.
More generally, improved highway
arteries, rail networks and upgraded port
and airport facilities are helping Greece
to position itself as an investment hub for
the region – a springboard to the regional
markets of the Balkans, the Black
Sea, Eastern Europe and the Eastern
Mediterranean.
“Greece is the gateway to the Balkans.
We have made investments in those countries and therefore we are the best partners for them,” says Mr Bakouris.
Greece has maintained strong cultural
and economic ties in these regions and
Greek companies have already invested
heavily in the Balkans – more than
$6 billion during the last decade. ■
❑ The changing business environment
in Greece has attracted the attention
of major foreign companies. The
presence of international corporates
like Aventis, PricewaterhouseCoopers,
Allianz, Shell, Sun Microsystems and
Allied Domecq highlights the broad
potential for growth in Greece, as well
as its easy access to the growing
markets of the Balkans.
The Greek manufacturing sector is
still small by European standards,
accounting for about 13 per cent of
gross domestic product (GDP), yet it
accounts for a substantial chunk of
Greek exports. The largest and
generally most profitable sectors are
consumer goods, especially foodstuffs,
beverages and tobacco.
In the beverages sector, one of the
world’s biggest players, Allied Domecq,
is increasing its commitment to the
Greek market in the belief that there is
good growth potential.
The group’s strategy is to achieve
double-digit profit growth every year.
There is a solid platform on which to
expand, as Greece is ranked one of the
biggest per capita whisky consumers
in the world.
Allied Domecq’s leading brands
include Ballantine’s whisky, for which
it is targeting a younger market with a
major promotion programme this year,
and Serkova Vodka, which was
previously produced locally but is now
made in Scotland.
“We started Serkova as a cheap
vodka and gradually invested money in
it through TV adverts to create equity
in the brand and at the same time we
kept increasing the price,” says
managing director Manolis Paterakis.
“Our major weakness was that it
was not imported. Greece does not
have a tradition of having a local
vodka, so we decided to send the
bottling overseas in order to have the
tag that it is imported.”
Mr Paterakis says Allied Domecq is
keen to develop the white spirits
market in Greece, alongside whisky
and brandy. This will include raising
the profile of Beefeater gin against its
main rival, Gordon’s.
“We aim to expand the white spirits
market rapidly as we believe there is
potential here,” he says. The firm’s
other leading brands include Kahlua,
Tia Maria, Teacher’s and Canadian Club.
Allied Domecq is looking for
acquisitions in Greece as well as
investigating the potential of wine
development. The Greek market is
strong, although brand names have
not been developed as in other
European wine-producing countries.
In recent years there has been a
trend towards producing higher quality
wine, with the aim of expanding export
markets. Mr Paterakis says Greece has
the potential to compete with wines
from Italy and Spain.
“We see huge growth potential for
premium wine in Greece,” he adds.
“It will take some time for people to
change their habits, but the trend is
strong and positive in this direction.”
PATERAKIS
‘We see huge growth
potential for premium
wine in Greece’
Greece was slow to join the internet
revolution – in 1999, Greek expenditure
on information technology totalled less
than one per cent of GDP, compared
with an EU rate of 2.7 per cent,
according to the European Information
Technology Observatory 2001.
The celebrated digital guru Nicholas
Negroponte, a Greek-American and
the co-founder and director of the
Massachussetts Institute of
Technology’s famed media laboratory,
says internet use in Greece is still low.
However, the liberalisation of
fixed-line telephony last year and the
establishment of the Athens Internet
Exchange has accelerated online usage.
The government is determined that
Greece catch up with its fellow
EU members and is putting up about
$490 million for a programme designed
to increase Greek competitiveness by
introducing the internet in business
and through the electronic delivery of
government services.
The Ministry of Development has a
programme called Go Digital, designed
to connect 50,000 small businesses to
the internet and equip them with basic
e-commerce skills. Taxpayers can
already acquire tax forms and guides
over the internet, and the self-employed
can file VAT returns online.
The Telecommunications and
Information Technology Research
Institute for Southeastern European
Countries started operations in January
in the northern city of Thessaloniki.
The institute was founded by the
Association of Northern Greek
Industries, state-owned operator OTE
Telecom and several major domestic
companies from the telecoms and
IT sectors.
All this spells good news for foreign
firms who operate in IT as well as
service companies. For example, the
Greek market is now the third most
important in the Mediterranean region
for US-based Sun Microsystems (after
Israel and Turkey).
About a fifth of the computer
manufacturer’s total annual turnover in
the 26 Mediterranean countries is
generated in the Greek market.
Regional managing director Tony
La Rosa says Sun Microsystems Hellas,
which was established in 1995, will
experience 25 per cent growth in the
IT market this year.
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World Report
GREECE 5
25/2/02
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Page 6
BANKING
New partners,
new markets
he Greek banking sector, once
dominated by the government,
has been utterly transformed in
recent years. There is still a great
deal of activity, with banks competing for
strategic partners, in some cases turning
to foreign institutions.
In January, the fifth-ranked Piraeus Bank
closed a deal with Dutch bank ING,
which will see the two join forces in
providing asset management products and
services in the Greek market, as well as
bank assurance and employee benefits.
ING group, which includes insurer
Nationale Nederlanden, has had a local
presence since 1995 and has four branches.
The two banks will combine for joint
ventures after Piraeus Bank completes its
expected majority takeover of Hellenic
T
Industrial Bank, which is currently a
public sector entity.
Piraeus president Michael Sallas says
the bank will absorb ING’s four branches
and Nationale Nederlanden, with 2,500
advisers and 100 branches, and distribute
the joint venture’s products.
“Apart from the deal’s contribution to
Piraeus, Greece and the economy will
benefit from the trust shown by ING
whose management has a very positive
impression of our economy,” he says.
The Piraeus-ING agreement came two
days after the collapse of the proposed
merger of Greece’s two largest financial
institutions – 161-year-old state-owned
National Bank of Greece (NBG) and the
private Alpha Bank. The $8.85 billion
deal, announced last November, would
Photo: Reuters
The state is promoting privatisation while the banks look
to the potential Balkans market of 60 million customers
have been the country’s biggest-ever
business merger. Although the two companies and the government believed the
creation of a mega-bank with 80 billion
euros in assets would lift Greece into a
new banking league, critics had questioned the resulting synergy.
Most analysts say Alpha will now
search for a foreign strategic partner instead, but the National Bank is
returning to its pre-merger strategy of
domestic growth and expansion in the
potentially lucrative Balkans.
The bank is expressing no interest in
forming a foreign partnership. Its view
is that a foreign bank holding a small
percentage of a leading domestic player
such as the National Bank would bring
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TAMVAKAKIS
‘A key objective
is to expand
our market’
little benefit, except to the product sales
of the partner company.
Vice-chairman Apostolos Tamvakakis
comments: “A key objective is to expand
our market.” At the moment, this is
restricted to Greece’s 11 million inhabitants, whereas the Balkans has a potential
market of some 60 million people. At
the same time, by forging a dynamic presence in southeast Europe, the National
Bank aims to play a major role in regional
capital markets.
At the beginning of this year there
were 16 venture capital funds operating
in the Greek market, with initial capital
totalling $310 million. One of the largest
venture capital funds is the National
Bank’s Greek Fund.
The bank has been gradually building
up a presence in the Balkans. It recently
opened its first branch in Belgrade and
further developments are planned in
Serbia. The bank is also seeking to expand in Bulgaria and Macedonia, where it
owns most of United Bulgarian Bank
(UBB) and Stopanska Bank respectively. It
has also been adding branches in Albania
and now has a small presence in both
Turkey and Romania.
EFG Eurobank Ergasias, a domestic
bank, is said to be interested in Alpha. A
member of the Latsis Group, EFG has
grown dramatically in recent years,
becoming a force in the domestic banking
sector through a string of acquisitions of
smaller institutions.
Since Greece joined the eurozone in
January, mergers and acquisitions have
been considered the quickest and most
effective means of strengthening domestic banks in the competitive market.
Analysts say the sector has plenty of
scope for profitable growth, particularly
as the country’s economy becomes more
integrated into the sophisticated financial
and savings institutions of mainstream
European Union states.
21/2/02
12:48 pm
Page 7
FINANCE
Change of approach as
financiers embrace euro
The sector has adopted a universal
structure to become a modern, integrated
provider of a wide range of products and
services in banking and insurance.
Greek bank lending has been generally
low in comparison with the rest of the
EU, with a 46 per cent ratio of loans
to gross domestic product (GDP) against
the European average of 72 per cent.
Portugal has a 101 per cent loan-to-GDP
ratio and Spain 66 per cent.
The Greek ratio is expected to increase
over the next five years. Mortgage loans
are expected to rise by 21 per cent and
consumer loans by 28 per cent.
Falls in interest rates, the end of credit
restrictions and the booming economy
helped to increase credit loans to the
16 venture capital
funds operate in
the Greek market
private sector by 29 per cent year-on-year
(as at May 2001). Consumer lending,
which represents only 4.5 per cent of the
GDP in Greece, is expected to increase
by 37 per cent this year as consumer confidence continues to be buoyant.
Tax changes that could reduce corporation tax from 35 per cent to 25 per cent
are currently going through parliament,
which could lead to even more mergers
and acquisitions. ■
PAPADAKIS
‘Business opportunities
between Britain and
Greece will increase’
Photo: STL Greece 2000
❑ Greece’s financial community has
enthusiastically embraced the euro and
sees itself as the emerging financial
centre of the Balkans and the region’s
natural link to the European Union
Doing business with and within the
outside world has long come naturally
to companies such as Papadakis
Investment Group, which trades in a
wide range of commodities and
extends loans to governments, banks
and large companies.
“We specialise in all areas of
financing,” says group president
Panagiotis Papadakis. “We have
operations in more than 60 countries
and we work to help poor ones. We
can provide finance for projects that
help the people of the world.”
Mr Papadakis emphasises the
importance of the EU in developing
Greece’s financial markets and he
expects his company’s business with
London to increase. “There is a great
friendship between Britain and
Greece, and there are many business
links between the two countries.
“As members of the EU, business
opportunities between the countries
will increase with the development of
joint ventures and other activities. We
hope this will be the case between
Greece and the UK.”
But while Mr Papadakis feels
comfortable doing business across
the world, for some Greek companies
the process of swapping the drachma
for the euro and ensuring the Athens
Stock Exchange (ASE) conforms
with standard practice in European
stock markets has required a change
of approach.
Greece has traditionally been
characterised by large public-sector
corporations and numerous small
companies, but now the local
business community and private
shareholders are being persuaded to
look at investment and business in a
different way.
ASE vice-president Lito Ioannidou
says: “One of the challenges we face
is to change the mentality of the
average Greek investor. The best way
of ensuring the market works is to
educate investors that they have to
be informed before they make any
decisions, and not be influenced
by rumour.”
Success can only be partly secured
through good regulation by the market
authorities, warns Ms Ioannidou, as
much depends on the instincts and
attitudes of the investors themselves.
She says: “No matter how good
the institutional framework may be,
it will not offer enough protection to
an investor who doesn’t abide by a
IOANNIDOU
‘Investors should be
informed before making
any decisions’
few basic rules of behaviour. Our main
goal is to carry out education in the
nature of investment and securities,
and in the proper ideals of a stock
exchange.”
Greece joined the eurozone in
January. New rules governing the
remote members of the stock exchange
– companies that do not trade on the
premises but at some distance away
from it – have been introduced for
Taking stock: new rules for remote members
in line with European Commission directive
companies which trade on the ASE but
are registered or domiciled elsewhere
in the EU. These companies are seen
as a potentially useful source of extra
liquidity and the rules have been
modified to bring them in line with a
European Commission directive aimed
at ensuring equality of rights, treatment
and terms of competition among all
European investment companies.
continues on p8
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World Report
GREECE 7
21/2/02
12:46 pm
Page 8
BANKING
Stock exchange
must equip for
a wider function
brokers to hold similar events in
Greece. “We encourage listed
companies to set up an investor
relations department and related
websites, so they can provide
up-to-date investment information in
a structured and easily accessible
manner,” says Ms Ioannidou.
“Most listed companies are
starting to respond positively and, of
course, some have had investment
departments and websites of their
own for some time.”
However, if the stock exchange is
to function in a bigger and wider
dimension than in the past, it has to
be adequately equipped.
Ms Ioannidou adds: “The second
challenge we face is to increase
market liquidity and retain those
funds within the country. This will
be achieved by an increase in the
number of members of the ASE,
the increased activity of those
companies, the introduction of new
products and, above all, the
potential and proper behaviour of
listed companies.”
The ASE is promoting new
business such as a market for
companies specialising in
innovation, as well as Eagak, a
Greek market for firms operating in
the emerging capital markets.
“Eagak will operate as a financial
springboard for the subsidiaries of
Greek companies located in the
Balkans, North Africa and other
emerging markets,” she adds.
Mergers creating a more
Increased competition is
leading to consolidation in
the banking sector, despite
the recent setback with
Alpha and the National Bank
ergers and acquisitions, organic
growth and foreign expansion
are just a few of the phrases
buzzing round the Greek
banking sector, and the country’s entry
into the eurozone can do nothing but
stimulate these activities.
Greek banking consultancy group
Kantor has already singled out the most
attractive opportunities for strategic
investors. Egnatia Bank, General Bank
and Attica Bank are the three most ripe
for acquisition, according to the consultancy’s annual survey. And EFG
Eurobank-Ergasias, along with Commercial
Bank of Greece, would benefit from
expanding its branch networks through
buy-outs, says Kantor.
Several Greek companies have been
expanding their retail-banking product
range, and restructuring their organisations and branches as a result of mergers
and acquisitions. Most banks already
have a fairly good branch distribution
across the country. NBG has the biggest,
followed by Alpha.
EFG Eurobank-Ergasias group is in the
top three in terms of assets in Greece’s
banking sector. A relative newcomer,
EFG has been one of the most voracious.
The bank has fought its way up into the
top echelon through a mixture of private
and online consumer banking. Over the
past five years, it has experienced 100 per
cent growth.
A little over a year since it merged
with Ergobank, EFG – in which Deutsche
Bank has a 10 per cent stake – reported
6.4 per cent net-profit growth to $154
million for the nine months to September
2001. The bank, with a market value of
$4.18 billion, achieved strong growth in
business volumes, with loans increasing
24 per cent to $8.81 billion and deposits
up 27 per cent to $13.79 billion.
Although Greek borrowing levels
remain low compared with other eurozone nations like Portugal and Spain in
terms of bank loans as a percentage of
gross domestic product (GDP), EFG, part
of the Swiss-based Latsis Group, is wellpositioned to take advantage of this.
In the first three-quarters of last year,
Greek consumer lending increased by 54
per cent, housing loans by 37 per cent,
and loans to small businesses rose by 47
per cent.
Non-performing loans (NPL) from the
group’s activities remained below three
M
Photo: Mark Henley/Impact
continues from p7
The stock exchange set up a
specialist Investors’ Help Unit Desk
open from nine in the morning until
nine at night. The aim was to
provide information for the smaller
retail shareholders to play a greater
role in the market.
Other measures introduced to
encourage non-institutional
shareholders include the publication
of investor guides in simple language
and improvements in the stock
exchange’s website setting out the
regulatory framework and
information on share transactions.
The ASE has created an electronic
hub with the aim of distributing
company statements and
announcements to all potential
investors. In a further bid to spread
the spirit of free enterprise beyond
Athens, the stock exchange has
launched a series of regular seminars
in major cities around the country.
For potential foreign investors,
the ASE organises roadshows and
advises listed firms and securities
High-street perks: domestic banks are seeing higher consumer lending, more housing loans being taken o
per cent of its total loan portfolio.
Including NPLs from the acquisition of
Bank of Athens and Bank of Crete, which
are fully covered by provisions, NPLs
amounted to four per cent of the group’s
loan book.
Late last year, EFG Eurobank Securities brokerage announced a merger with
Telesis and Ergasias Securities, giving
EFG a market share of more than 10 per
cent based on the volume of transactions.
EFG Eurobank-Ergasias deputy chief
executive Nikolaos Karamouzis believes
Greece has a much stronger banking sector today, partly due to the requirements
placed on it by the European Union.
He says: “The nominal convergence
of the Greek economy to the EU economy, which has taken place in recent
years – with lower interest rates,
exchange rate stability, reduction of budget deficits and strong economic growth
– has had significant benefits for the
banking sector.”
“The intense competition which has
prevailed since the liberalisation of the
domestic markets opened up new oppor-
tunities – on the one hand for consumers
and borrowers in general and on the
other for business in previously controlled
sectors like consumer and mortgage credit.
“The intensity of competition, coupled
with the globalisation of the markets, led
KARAMOUZIS
‘Intense competition has
opened up opportunities
in new business sectors’
several banks to merge in order to take
advantage of economies of scale and
revenue synergies in the new, growing
market. Simultaneously, new players have
entered the banking market with a view
to exploiting new opportunities.
“EFG Eurobank-Ergasias began 10
years ago with one branch, and through
acquisitions and internal growth it has
become the second major financial institution in Greece.”
Mr Karamouzis says the company’s
22/2/02
5:45 PM
Page 9
BANKING
streamlined and open sector
Established in 1929 to serve the agricultural sector, ABG’s strategy has shifted
in recent years with its transformation
into a universal bank with a full range of
commercial products. “It was something
that came about out of necessity – we
could not stay the way we were,” says
deputy governor Nicolas Zachariadis.
“Non-farm lending more than quadrupled between 1996 to 2000, whereas
agricultural lending rose by only 26 per
cent over the same period,” he says.
“This trend will continue, with our
emphasis on consumer and mortgage
credit and on lending to non-agricultural
companies, especially to small and
medium-sized regional enterprises.”
The bank has an extensive branch
network and although its strength lies
in Greece’s rural areas its presence is
familiar in towns and cities across the
country. “Our strategy envisages development in non-agricultural sectors, but at
the same time we will not be absent or
Most banks already
have a fairly good
branch network
allow our position to be weakened in the
agricultural sector, which provides about
nine per cent of our gross domestic product,” says Mr Zachariadis. ■
en out and increased borrowing by small businesses
aim is to become the most profitable
bank in Greece, but it will follow a cautious strategy in foreign expansion.
“We currently have a presence in
Bulgaria via Post Bank, and in Romania
with Bank Post, which is the fourthlargest bank in Romania. These banks are
profitable. We are interested in the region
because of their growth prospects as
long-term players.”
The state is to reduce its stake in the
Agricultural Bank of Greece (ABG) from
85 per cent to as low as 35 per cent. This
reduction will be carried out through
several methods, including the issue of
bonds that will be convertible into ABG
shares.
An additional 10 per cent stake will be
floated on the Athens Stock Exchange
this year, while an eight per cent share
will be placed among institutional investors, agricultural cooperatives and unions.
A strategic alliance with a domestic or
foreign banking institution for the statecontrolled bank will also be sought.
ABG’s subsidiaries will also be floated or
partially sold to a strategic investor.
World Report
GREECE 9
21/2/02
12:52 pm
Page 10
INDUSTRY
Good times roll as enterprises b
G
Industry has responded well
to the more competitive EU
environment, but there are
calls to speed up privatisation
the markets as fast as we can and also
privatise our state-owned companies. The
longer it takes to privatise, the harder it
will become.”
But he says the entrepreneurial spirit
has always been very strong in Greece; a
fact that has helped many businesses to
become more competitive. Companies are
now looking to expand their reach into
new territories, not just the near reaches
of the Balkans but also sophisticated and
distant markets, such as Western Europe
and North America.
Perhaps a visible symbol of Greece’s
new dynamic corporatism is Corinth
Pipeworks, still essentially a family-run
business but with more than 15,000
shareholders through the stock market.
It is one of the largest steel-pipe manufacturers in the world.
Using the ancient trading city to its
unique advantage, the company has built
its reputation on meeting the requirements of foreign oil and gas producers in
the Middle East, Africa and its emerging
Caspian region.
General director Kostas Mitropoulos
says that, despite unsettled markets, the
firm is looking at growth as high as 100
per cent over the next year, depending on
how the oil and gas market develops.
“We have been transferring and operating pipelines to bring oil from the
Caspian area to the Black Sea and we
were the first to do this. We have another
Photo: STL Greece 2000
reek industrial and manufacturing
companies have been enjoying
some good times of late. Business
confidence has been high on the
back of positive government reforms and
a better macroeconomic environment,
which has encouraged modernisation.
Industry has responded well to the
challenges posed by Greece’s entry to the
European Union and the more intensive
international competition it brings.
In 2000, an average rise of 30 per cent
in sales and 40 per cent in investment on
the previous year highlighted the reasons
behind the buoyant spirit of many firms.
Indeed, for the past few years, investment
rates have been among the highest anywhere in Europe.
Yet the transition process has not been
fast enough for some. The Federation of
Greek Industries (FGI), which represents
more than 1,500 local enterprises, is calling on the government to step up the pace
of privatisation and other crucial economic reforms.
FGI president Lefteris Antonacopoulos
says some of the problems of the past,
especially red tape, are still a drag on business and in attracting investment. “The
problems we’ve had in the public sector
and with bureaucracy are still very heavy.
We have a lot of work ahead of us in order
to facilitate these potential investors.”
Industrialists have criticised the slow
pace of the divestiture programme and
the government’s preoccupation with
raising funds from the scheme rather than
ensuring effective corporate management.
But Mr Antonacopoulos believes Greece
is a different country from how it was just
three years ago, although it needs to pick
up the pace as the competition is stronger.
He says: “We need to synchronise and
modernise the public sector, liberalise
Investment drive: Corinth Pipeworks’ $169 million programme is designed to raise capacity
large pipeline in Kazakhstan, which is
about 700km in length,” he says.
Corinth Pipeworks, which also makes
pipelines for the expanding water industry, mostly for export, recently completed
a major $169 million investment programme to boost capacity. As well as
upgrading its original plant in Corinth,
this has resulted in the construction of a
new manufacturing facility at Thisvi, on
the coast of the Gulf of Corinth.
The company dominates the markets
of the Middle East, North and West
Africa, Syria and India, as well as the local
Greek market, but it is still looking to
branch out. “We are trying to diversify,
not just in one area but in many areas of
the industry, so if one market collapses
we can still hold on to the others,” says
Mr Mitropoulos.
This includes helping the reconstruction of the Balkans where several major
privatisations are taking place that could
open up new opportunities for the firm.
Mr Mitropoulos says the company
attaches great significance to innovation
in order to maintain growth and a competitive edge. He also believes other
Greek companies in the industrial and
manufacturing sectors have taken on the
same lessons. “Some other companies are
improving – it’s not just us,” he says.
“You need to move fast though. The
ANTONACOPOULOS
‘The longer it takes
to privatise, the harder
it will become’
MITROPOULOS
‘We are trying to diversify
– to improve, companies
need to move fast’
Greek private sector is moving in the right
direction and it is expanding quickly.”
Asprofos Engineering, a subsidiary of
state-owned refinery group Hellenic
Petroleum, is another leading local player
taking its expertise overseas. Originally
formed from the upgraded works of the
state-owned Aspropyrgos refinery back in
1983, it has grown into a separate engineering firm with an annual turnover of
$19.1 million.
Asprofos chairman Lazaros Lazaridis
has a simple piece of advice: either a
company continues to grow or it dies.
“We are very strong in many fields, but
I would say our core strengths are those
22/2/02
5:45 PM
Page 11
INDUSTRY
Photo: Asprofos Engineering
eam up business
Strategic thinking: Asprofos Engineering is a growing local firm taking its expertise overseas
LAZARIDIS
‘Our core strengths are in
refining, petrochemicals
and the energy sector’
we had from the beginning, which lie in
refining, the petrochemical industries and
the energy sector.”
Asprofos has formed strategic partnerships with specialists in the energy sector
and with consultancies to enhance its project capabilities. It is now moving into
new business areas.
Mr Lazaridis says the company has an
ongoing programme to review its strategy,
processes, information systems and personnel. It is also looking to make further
inroads into foreign markets, especially
North Africa, the Balkans and Turkey, and
possibly other parts of Europe.
He suggests that Greek companies
often provide better value than their
Western European counterparts. “We are
very competitive in the areas in which we
can substitute for European companies.
Let us say that instead of using British,
French or German companies, you can
use Greek companies because they are
more competitive.”
Asprofos has developed close relations
with the Public Gas Corporation of
Greece (DEPA), which is looking to
develop major gas import-export pipeline
links with neighbouring countries.
“DEPA is in discussions for a pipeline
from Italy and then for one that will
follow on to the Greek-Turkish border,”
says Mr Lazaridis. “We could be very
useful in this, and we are very open and
willing to cooperate.”
In addition to these ambitious schemes,
the gas corporation’s management is in
the process of building a modern,
dynamic energy company around the
emerging, local, natural gas market. With
the introduction of private funding
through a series of strategic partnerships
with major foreign energy players, such as
Italy’s Italgas, the development of the gas
sector is expected to lead to a high level of
work for the Greek industrial sector.
DEPA chairman Dimitris Sotirlis says
that being part of Europe will assist the
evolution of the indigenous gas industry,
just as it has helped the development of
many local businesses.
“We are trying to develop a highlycompetitive environment and you cannot
achieve that independently. You have to
belong somewhere in a global club of
countries like the European Union, with a
unified monetary unit.”
World Report
GREECE 11
21/2/02
3:59 pm
Page 12
PHARMACEUTICALS
Price reform promises
boost for home market
emand for pharmaceutical products
has grown considerably in recent
years with overall expenditure
reaching $1.64 billion, up from
$1.09 billion in 1995.
There is still room for further expansion in the domestic market. Many wholesalers choose to export medicines rather
than distribute them locally because of the
current regulated pricing structure, and
this has resulted in shortages at times.
Industry concerns over the pricing
policy, which keeps drug prices artificially
low in the local market, have resulted in a
major review of the way the system works
by the Ministry of Development.
The Drugs Prices Committee had been
seeking to approve a new price list for
124 medicines using the existing formula,
which is determined on the basis of the
lowest price elsewhere in Europe.
D
At the end of last year, major drugs
companies won backing from the Council
of State, the country’s highest court, to
annul the present tightly-regulated system,
which dates back to 1997.
Pharmaceutical companies in Greece
blame this system for the sharp rise in
exports of drugs in recent years and the
decline in domestic production. In the
past five years, exports leapt from $43.2
million to around $261.86 million today.
Greece boasts some of the world’s
biggest and most prestigious names in the
pharmaceutical business, including Aventis,
the multinational formed from the merger
of France’s Rhobe-Poulenc and Hoechst
of Germany in 1999.
Dr Leonidas Crassaris, head of
Athens-based Aventis Pharma and the
Hellenic Association of Pharmaceutical
Companies, hopes to see the European
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CRASSARIS
‘We are now stronger
in all areas because
of synergy’
MARINOPOULOS
‘Our strategies involve
specialisation to create
centres of excellence’
PLUSS
‘What makes us feel
strong is that we want to
improve and save lives’
Union gaining greater influence in the
market, which will ultimately affect
pricing and other policies. He says:
“Some things have already improved in
Greece due to the European legislation
that has been imposed. Unfortunately,
the commission has left each government
free to arrange for the social welfare and
security of its people.”
Still, as a business, Aventis, which is
strong in a wide range of drugs, from
diabetes to cancer treatment, is showing
promising growth in its early years. Mr
Crassaris wants the company, which
competes against big players such as
Novartis and Glaxo SmithKline, to be
the best in the local market. He also sees
Greece as a base for tapping overseas
markets such as the Balkan states.
“We are now stronger in all the areas
we existed in before because of synergy,
and when I say synergy I mean it in the
Greek sense of working together and not
in the American sense which means
savings,” adds Mr Crassaris.
Aventis recently sold its L’Aigle production site in western France to Famar, part
of Greece’s Marinopoulos group and one
of the rising stars of the domestic industry.
The facility will produce and package
pharmaceutical products such as pills and
capsules for clients that include Aventis.
Famar, a service provider to the healthcare sector, which develops and produces
pharmaceutical products and offers packaging services to the multinationals, is
rapidly expanding its operations across
Europe. In recent years, it has emerged
from a traditional, Greek family-run
Photos: Famar
Some of the biggest and most prestigious drug companies
are planning expansion across Europe and into the Balkans
business into a professionally-managed
corporate with a global outlook.
Famar president Panos Marinopoulos
says the company is hoping to continue its
expansion in Greece and across Europe
by investing in new facilities and acquiring
more sites, with the aim of creating
specialist centres of excellence for manufacturing individual products.
“We will be expanding in Europe and
acquiring more sites, which bring a lot
of people and a lot of business. Once we
21/2/02
4:02 pm
Page 13
TELECOMS
create a network in Europe, we are going
to specialise sites,” says Mr Marinopoulos.
“One of our main strategies involves
specialisation, through which you can
gain more flexibility and productivity,
while saving costs. If you have a plant
producing lots of unquoted tablets then
this is a centre of excellence for the
tablets. When you create that, it is very
difficult for anyone else to do better and
it will be difficult for a client to be dissatisfied with you.”
Mr Marinopoulos believes Famar’s
strength in the Greek market lies in its
ability to sell local expertise to the big
multinationals, forming mutually beneficial joint ventures. “We put on the table
what we offer and they put on the table
what they want, and then we find a way
to collaborate and form a joint venture.”
Famar has been successful in meeting
the changing demands of its bigger
clients, as and when they arise. “Famar is
a service provider and is doing just that,”
says Mr Marinopoulos. “It is following
the needs of its clients, but when the
client needs physical distribution, Famar
will provide it. If the client needs development, Famar provides that as well.”
This is a strategy the company hopes
to continue in the foreseeable future in
order to boost further growth. “We will
be looking at our clients since they are
global and we would like to follow them.
They are showing us the way and we
will be doing what is required,” adds Mr
Marinopoulos.
Famar is also helping Novartis (Hellas)
– the Greek arm of Swiss pharmaceutical
giant Novartis – to adjust to some of the
peculiarities of the local market in terms
of packaging, transport and distribution
methods.
Novartis (Hellas) president Michael
Pluss believes the partnership is a crucial
The past five years
have seen a sharp
rise in exports
one. “The advantage with Famar is that,
because it works with other companies, it
is exposed to more policies of quality
assurance. I would say that it has pushed
us to an even higher standard.”
Novartis is actively looking to develop
its Greek business as well as its global
position. It has just received approval for
the use of its ground-breaking new drug
for the treatment of myeloid leukaemia
from Greece’s National Pharmaceuticals
Organisation.
Mr Pluss says Novartis has developed
a strong corporate identity and wants to
be the best in the business. “Basically,
what makes us feel strong is that we want
to extend, improve and save lives. This
gives a strong direction to your research
as well. And this has given a strong signal
to all our affiliated companies.” ■
Mobiles set to overtake fixed lines
❑ The southern Balkan region is a
major potential market for a variety
of companies and one Greek operator
is set to take the lion’s share of
telecommunications in the region.
The state-owned Hellenic
Telecommunications Organisation
(OTE) expects mobile telephony to
leapfrog fixed-line services in the
region in the next few years.
In November last year, OTE bought
Macedonia’s second GSM (global
system for mobile communications)
licence for $25 million. This gives the
operator a footprint covering the entire
southern Balkan region – a market of
45 million people compared with
Greece’s 10.5 million. The potential is
huge: mobile penetration in the region
is still only about 15 per cent, far
below western European levels.
FATSEA
‘Mobile penetration
has leapt from nine per
cent to 63 per cent’
Cosmote, OTE’s mobile phone
subsidiary, acquired 90 per cent of
Albanian Mobile Communications
(AMC) in 2000. The Greek firm rapidly
rolled out an expanded network and
within a year had increased its
subscribers from around 13,000 to
more than 200,000.
This was a tremendous advance for
a company that only launched
commercially in 1998, well behind the
other two operators Panafon and Stet
Hellas. Cosmote clinched the number
one spot in the Greek mobile market
last year, pushing Panafon (53 per cent
owned by Vodafone) into second place.
Cosmote has more than 2.7 million
subscribers today, a 55 per cent rise
on the previous year. Of those, nearly
1.5 million have a contract while the
rest are prepaid users.
At the time of its launch, the mobile
penetration rate in Greece was only
nine per cent, so Cosmote’s strategy
was to enter the market with lower
tariffs, says marketing and public
relations director Marilena Fatsea.
“Consequently, mobile telephony
became accessible to everyone.
“The penetration rate is now more
than 63 per cent. Within three years,
Cosmote succeeded in covering virtually
100 per cent of the population. Even
the most remote areas of Greece enjoy
mobile communications thanks to us.”
Within a year of acquiring AMC,
Cosmote has turned the operator into
one of the most profitable in Europe.
“This was achieved by repeating the
successful model that was applied in
Greece – the rapid roll-out of a
superior GSM network, simple tariffs
Photo: Hellenic Telecommunications Organisation
Medicinal purposes: a major review aims
to eliminate the problem of shortages
Remote access: aiming to connect everyone
and access to all,” says Ms Fatsea.
“AMC contributes very positively to our
financial results by adding approximately
nine per cent of revenues and 15 per
cent of group profitability.”
Late last year, OTE was in talks with
Telenor on whether to buy the Norwegian
company’s 18 per cent stake in
Cosmote to add to the 59 per cent
stake it already owns. The listed
company, which is offering free monthly
internet connection to new customers,
features in the FT500 survey.
In the first nine months of 2001,
OTE reported a 282 per cent rise on
consolidated net income to $111 million.
Company earnings before interest, tax,
depreciation and amortisation (EBITDA)
in the period increased by 152 per cent
to $257 million.
Ms Fatsea says future plans include
foreign expansion and the exploitation
of new technology, including third
generation (3G) mobile telecoms. “We
were the first to offer GPRS (general
packet radio service) in Greece and with
it we set up a nationwide network. We
are developing GPRS services according
to market demand, which is the name
of the game right now,” she adds.
Meanwhile, Lannet Communications,
a subsidiary of Greek textile group
Klonatex, hopes to gain a five per cent
share of the fixed-line market by 2005.
Lannet completed its interconnection
with OTE’s network late last year,
following the deregulation of Greece’s
local-loop telecoms market.
Lannet plans to invest $66 million
over the next three years to strengthen
its position in the local IT market. Chief
executive Stavros Papapanagiotou says
Lannet, which was set up in 1999 and
began commercial operations in January
last year, is now the biggest private
investment company in the country.
continues on p15
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World Report
GREECE 13
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Page 14
TOURISM
New tool for social and
economic development
T
Higher government loans, a longer summer season and
a three-year development plan should give tourism a lift
Tourism Organisation says that it has
secured the support of 110,000 travel
operators for the scheme. As a result, an
additional 55,000 people visited off-season last year.
Funds from the European Union are
being used to develop eco-tourism in a bid
EU funds are being
used to develop
eco-tourism
to diversify the industry while protecting
the environment. Dimitris Georgarakis,
tourism secretary-general at the development ministry, says: “Eco-tourism is a
very sensitive subject. The strict laws protecting ecology and the environment will
Our challenge is life.
Aventis SA, Strasbourg, www.aventis.com
Culture club: the Hellenic Festival showcases history,
Well chosen locations result
A new way of thinking
about life sciences:
From treating illnesses
to curing diseases.
Every doctor wants to help patients get well fast.
But, in spite of the major successes in pharmaceutical
research, there are still many diseases for which doctors
have no effective treatment or cure. At Aventis, we are
developing pharmaceuticals that will enable doctors to
treat diseases more effectively. At the same time,
we’re working on a better understanding of what
causes major diseases in order to develop pharmaceuticals
to cure them.
remain in force indefinitely. The point of
eco-tourism is to keep the ecological standards and blend people with nature.”
Mr Georgarakis says new laws will
create incentives to encourage further
foreign investment. “The concept is to
leave the tourism industry to the professionals instead of the government. The
state can be a good investor or public
administrator in some things, but it is not
good in business.”
The government is privatising Hellenic
Tourist Properties (HTP), the state
agency that manages public-sector assets
in the tourism industry. HTP’s assets are
valued in excess of $7.6 billion, representing the biggest property portfolio in
the country.
HTP was founded to build infrastructure in Greece, and in the 1960s it set up
the first hotels and marinas for a new
Photo: Piers Cavendiah/Impact
ourism officials are cautiously
optimistic about business, with
reservations for 2002 showing a
30 per cent year-on-year increase.
The tourism authorities are drawing
up a three-year development plan for the
sector and the government has granted
loans worth $27.58 million, almost twice
the level it spent in 2000. Most of the
money is going towards a major advertising campaign.
Greek development minister Akis
Tsohatzopoulos says: “Our priority is to
use tourism policy as a tool for economic
and social development.”
Private sector operators, under the
Association of Greek Tourist Enterprises
(SETE), have welcomed the government
support. The 2001 tourism season is
expected to close with five per cent more
tourists from the UK, at 2.9 million, compared to the previous year.
To give the industry a lift, the summer
season has been lengthened to April to
mid-October, supported by government
subsidies. The state-run Greek National
❑ International groups own and run
many of Greece’s hotels, but recent
years have seen the Greeks themselves
investing heavily in building new
establishments and taking over others.
One Greek group has expanded
since its foundation two decades ago
into the largest hotel chain in the
country. Grecotel, which began in
1982 with one hotel in Crete, now has
23 hotels with a total bed capacity
of more than 13,000.
A new property, the Killini Spa
Complex, is being totally rebuilt before
reopening this year. Part of Grecotel’s
success has been the group’s careful
choice of location for its resort hotels,
which all overlook fine beaches
and have won international acclaim
in the tourism business for their
lush gardens.
There are now 10 hotels on Crete,
including the exclusive Elounda
Village, with four pools, a wide
range of watersports and relaxing,
secluded gardens.
On Corfu there are two Grecotel
hotels, including the five-star Corfu
Imperial, and one each on the islands
of Rhodes, Mykonos, Halkidiki and Kos.
Other hotels are in the Peloponnese,
Attica, Kalamata and Thessaloniki (the
famous Macedonia Palace). There are
three in the capital, including the
five-star Athens Plaza, built in 1981
and run by French company Meridien.
The Athens Plaza was taken over
by Grecotel in 1998, and was then
closed for five months for major
refurbishment.
General manager Constantinos
Zarikos says: “We spent $5.8 million
on the renovations and made a lot of
changes to the hotel. We compete with
the biggest five-star hotels in Greece,
ZARIKOS
‘We compete with the
biggest five-star hotels
in Greece and we lead’
including the Marriott and Hilton. At
the moment, we are the leader.”
Mr Zarikos says about 60 per cent
of guests are businessmen and women.
The Greeks account for the largest
percentage of the hotel’s clientele,
followed by Americans – the majority
on cruises who usually stay just one
night – and Cypriots. About one visitor
in 10 is from the UK.
The Athens Plaza hotel, which has
182 rooms and 23 suites, is situated
next to the Greek Parliament in
Constitution Square. The building
a
21/2/02
4:46 pm
Page 15
TOURISM
tourism industry. Company managing
director Tasos Chomenidis says: “It was a
good idea to do this at that time because
we created Greece as a tourist destination. The local economy could not afford
to make those investments.”
Since the mid-1990s, with the tourism
sector well established, the plan has been
to list HTP on the Athens Stock Exchange
and this should happen early this year.
Mr Chomenidis says the profile of the
industry must change from that of mass
tourism as those holidaymakers tend to
CHOMENIDIS
‘We need to upgrade the
services we offer and
attract higher spenders’
archaeological sites and contemporary life
continues from p13
“The difference between Lannet
and other companies in the market
is that its concept is to be an
added-value operator,” he says.
“Lannet provides tailor-made
solutions for Greek corporations. We
try to provide both data and voice
services and we have invested a lot
of money in infrastructure.”
Lannet posted revenues of $10.39
million for 2001 and is aiming for
$23 million this year. The company
ZARIKOS
‘We’re different as our
concept is to be an
added value operator’
aims to capture a five per cent
market share in the telecoms sector
by 2005 and a listing on the Athens
Stock Exchange main market by
June 2002.
The company, which uses a unique
billing system, has a wide range of
corporate clients, including banks,
hotels, construction firms, shipping
lines and retailers. The interconnection
with OTE has enabled Lannet to
extend and improve its services,
and it is now providing fixed-line
phone services to households.
in more beds than the rest
Photo: Hotel Association of Crete
y,
spend less per capita than in the past.
“They seek very cheap quality. We have
good quality, but we can’t operate at
those prices,” he says.
“Therefore we have to change our type
of tourist, upgrade the services we offer
and attract higher spenders. We cannot
afford to have more than 13 million
people coming here every year.”
The attempt to attract more upmarket
tourists is partly focused on tapping into
Greece’s long history and its rich and
colourful culture. This is one of the chief
aims of Hellenic Festival, an association
that groups together the organisers of
cultural and artistic events held in Greece.
Hellenic Festival chairman Periklis
Koukoç says the association was involved
in entertaining audiences of 300,000
people last year. One of the challenges
facing the organisers is to be able to stage
performances to a high artistic standard
in large auditoria, such as the ancient
11,000-seater theatre at Epidaurus or
the 5,000-seater Herodus Atticus theatre
under the Acropolis in Athens.
Mr Koukoç explains: “The aim is to
promote events, both to the Greek public
and to the international visitors who
flock to our country during the summer
months. The festival has the dual goal of
showcasing Greek cultural traditions as
well as contemporary Greek culture, in
order to create an important attraction
for tourism.”
The Festival of Athens regularly plays
host to some of the most famous international artistes from a broad spectrum of
the arts. Mr Koukoç says: “Tourists have
always visited Greece for its culture as
well as its natural beauty. The country
offers the chance to make a journey
through the history of mankind via our
monuments and ancient sites.
“But, we try to show that Greece can
offer a contemporary culture as well. A
tourist can spend his time on the beach
all day long and then attend a concert
or a performance of an ancient Greek
drama in the most beautiful theatres in
the world, all under the blue sky of the
summer night.” ■
Making a splash: Grecotel began in 1982 with one hotel in Crete and now has 23 there
is within walking distance of the
business and shopping districts,
and its suites offer splendid views of
the Acropolis.
Mr Zarikos says the Olympic Games
in two years’ time will provide a
welcome boost, not only for the hotel
but also for Greece as a whole.
“This is a big opportunity for Greece
to really make its mark on the map
and achieve a better position among
European countries,” he says.
“There will be a lot of money
coming into Greece, and there is also
a lot of progress being made in
developing our infrastructure, such as
the new airport, the new Metro and
new highways.”
World Report
GREECE 15
22/2/02
5:47 PM
Page 16
CONVENTIONS
Mixing business with pleasure
C
onferences mean big business for
Greece’s tourism sector, showing
massive potential as a revenue
earner, particularly during the
‘off season’, traditionally a period of low
occupancy.
Capsis Convention Centres & Resort
Hotels is a family-owned company that
has specialised in the hospitality business
for over 20 years. Marketing director
Irini Varda-Capsis says: “We were one of
Conference operators cash in on the growing trend for bigger and better events
the very first companies to go in that
direction. Greece is the birthplace of the
symposium and the congress, and it is a
country where you can combine business
and leisure perfectly. This makes Greece
an ideal destination.”
Conventions and similar events
account for some 90 per cent of Capsis’s
revenues. Last year, the company opened
a second hotel and conference centre on
the island of Rhodes. “The trend in this
industry is towards the organisation of
bigger conferences, and because our
clients asked us for larger conference
halls we decided to build the convention
centre at Rhodes,” says Ms Varda-Capsis.
“This is the biggest convention centre
in Greece and one of the largest in the
Mediterranean.”
Up to 8,000 people can be accommodated in the conference halls and meeting
rooms, and there is also a 3,170 sq metre
exhibition hall. Ms Varda-Capsis says the
complex has an edge over many of its
competitors in Europe.
The convention centre and five-star
hotel are next to the beach and only three
miles from historic Rhodes town and the
international airport. “This combination
is what makes us unique because it is
something that our clients can’t easily
find elsewhere,” she says.
The 691-room hotel and other hotels
within walking distance provide accommodation for more than 10,000 conference delegates. “The whole area around
the hotel and complex will become the
new Mediterranean destination for conventions,” she predicts.
The project cost about $17.69 billion.
Ms Varda-Capsis believes the expenditure
was worth the effort, not only for the
company but also for the country as a
whole. “Greece will have the capability of
attracting the very large conventions and
conferences that it was losing until now
because it lacked a venue to host them,”
she says.
Capsis Beach Hotel and Sofitel Capsis
Palace Conference Centre, the company’s first convention centre, is at Aghia
Pelaghia, west of Heraklion on the northern coast of Crete. It has three conference
halls accommodating 4,800 people, plus
meeting rooms and exhibition space.
The largest resort convention centre in the
Mediterranean – Sofitel Capsis Hotel Rhodes
& Convention Center ‘Marika Capsis 2000’
21/2/02
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Page 17
CONVENTIONS
Sofitel Capsis Hotel Rhodes & Convention Center ‘Marika Capsis 2000’ is also a fully equipped five-star deluxe resort hotel
VARDA-CAPSIS
‘Greece is the
birthplace of the
symposium’
By focusing on convention business,
the company is able to operate all year
round. “A lot of conference clients do not
need to bring their delegates over during
the summer. In fact, they actually prefer
the winter and we have extended our
season to almost 12 months a year.”
Capsis is trying to encourage other
hotels in the area to follow suit. “We need
them to put up the people who attend the
big conventions and they are doing it
slowly. By creating this new convention
centre, we have changed the outlook for
Rhodes as a destination for visitors.”
Ms Varda-Capsis and her colleagues
are considering new investment opportunities. “Athens could have a very large
convention centre for 10,000 people or
more, and this is something that the
Greek government is considering. They
say they will create one, and this would
boost Athens as a destination and also
help us. But we need to see what happens. Hopefully, it will be done.”
Many conventions are held at the
luxury Astir Palace Resort overlooking
the beautiful Vouliagmeni Bay, 16 miles
south of Athens. Not having a convention
centre in Athens is a “big problem”, says
Astir director of marketing and sales
Myrto Sofianos.
On the other hand, she adds: “We’ve
got all the advantages of being near the
capital, without any of the disadvantages
of being in it. Maybe in a few years, in
view of the Athens 2004 Olympics and
the upgrading of the city, we may be able
to attract some upmarket tourists.”
An affiliate of the National Bank of
Greece, the Astir resort comprises three
hotels and 76 bungalows with a total of
550 rooms. The Arion Astir Palace hotel
was the first to be built and quickly
became the place in the country for
the international jet set. Its all-marble
reception area and verandahs give it a
very luxurious atmosphere.
The Nafsika Astir Palace hotel is the
best for conventions. The congress hall
and foyer can accommodate more than
600 people.
“The Aphrodite Astir Palace hotel is
what we would call deliberately casual,”
she says. “When it was first designed,
it was very casual and simple, but we
have adapted the design. The hotel has
just been renovated and we use it to hold
a lot of conventions.”
The resort, which is open all year round
– although usually one of the hotels closes
for the winter season – is mainly used for
conventions and tourism business is not
yet significant.
“We were the first to call this area
the Athens Riviera and there are now
some nice new resorts in the area,”
adds Ms Sofiano. “There is the Apollo,
which opened a couple of years ago, as
well as a resort in nearby Lagonissi –
and another hotel is opening this year
in Sounio.” ■
At Eydap, we are
safeguarding Greece’s
valuable hydraulic resources.
With the know-how and
capital provided by
international investors, we
are facing up to the challenge
of ensuring a reliable water
supply for future generations.
The Astir Palace resort comprises three hotels, 30 minutes’ drive from Athens, overlooking the
beautiful Vouliagmeni Bay, combining an inspiring location with modern convention facilities
WATER SUPPLY & SEWERAGE
CORPORATION OF ATTICA
Attica Water Supply and Sewerage Corporation
156 Oropou St., 111 46 Galatsi, Athens, Greece
Tel: +30 1 253 3680, Fax: +30 1 252 4162
World Report
GREECE 17
21/2/02
4:58 pm
Page 18
INFRASTRUCTURE
Corinth’s unique pa s
Dreamt up by the ancient
Greeks and first excavated
by the Romans, the modern
canal is a wonder of
19th century engineering
isitors to Greece do not have to
travel very far to view ancient
ruins, and the city of Corinth is
no exception. A strategic and
commercially important centre by the
eighth century BC, controlling the land
and sea routes of the Peloponnese, today
Corinth is enjoying a renaissance.
This is partly due to the increasing
investment being made in the prefecture
of Corinthia in hotels, restaurants and
other tourism facilities. Together with
new management at the 19th century
Corinth Canal – a tourist landmark in its
own right – and vastly improved road
and rail links, the region is anticipating an
economic upsurge.
The Corinth Canal cuts across the
isthmus in a straight line for nearly four
miles, and the highest point from sea
level is 259ft. Today, some 12,000 vessels
pass through it every year. The Greek
government owns the canal but, last
September, Sea Containers took over its
management and expects to raise the
number of transits by 50 per cent through
more effective sales and marketing.
The company plans to build a major
marina and a ro-ro ferry berth at the
northern end of the canal. Meanwhile, at
the southern end there are plans to
develop a mixture of leisure facilities,
including a hotel, shops, restaurants, cinemas and a water park, as well as providing
for tourist boat trips through the canal.
Greece’s major motorway between
Athens and Patras passes over the canal,
as does a new railway being built between
Athens and Corinth. A stop-off to take a
look at the canal, and perhaps eat a plate
of souvlaki, is a popular pastime for
drivers using the motorway.
Glenn Michael, the canal management’s
chief executive, says: “The history of this
area is unbelievable. People will be able to
come and spend a day here, learn about
the history, then go for a boat ride on the
canal, eat and relax.”
The construction of the canal itself is a
story that might have sprung from Greek
mythology. For centuries, the Corinthians
had considered ways of shortening the
voyage for ships sailing between the
Aegean and the Adriatic, which entailed
circumnavigating the Peloponnese, adding about 185 miles to their journey.
The first solution came in the late
seventh or early sixth century BC, when
the tyrannical rulers of Corinth built a
3.5-metre-wide road from the Saronic
Photo: Bernard Regent/Hutchison Library
V
Bon voyage: cutting a straight line across the isthmus fo
Gulf to the Gulf of Corinth. A custombuilt, wheeled vehicle called the olkos
was used to haul ships overland along a
limestone-paved road known as the
Diolkos. Sections of this road, deeply
rutted by the wheels of the olkos, can still
be seen today.
The idea of cutting a canal across the
isthmus was proposed by many ancient
Greeks. The first was Periander, the
tyrant of Corinth, who drew up plans in
602BC. Others who later proposed a
canal include Julius Caesar and Caligula,
21/2/02
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Page 19
INFRASTRUCTURE
Ferdinand de Lesseps, who had been responsible for the Suez Canal.
Ancient Corinth grew up at the foot of
a steep, rocky peak called Acrocorinthus,
which rises nearly 2,000ft, from where
both the Gulf of Corinth and the Saronic
Gulf can be seen. The site, just 50 miles
from Athens, gave the Corinthians a
strategically powerful advantage as they
were able to control the commercial traffic in the Peloponnese.
With harbours on both gulfs, Corinth’s
power extended along the Adriatic to
Macedonia. But by the sixth century BC,
Corinth’s power began to wane when the
Athenians’ shipbuilding prowess, seamanship and commercial skills flourished.
The often-bitter rivalry between the two
cities would last for 200 years.
In 338 BC, Corinth lost its independence when Philip of Macedonia turned
it into his puppet state, and the city was
Improved road
and rail links have
boosted the region
us for four miles, the canal carries 12,000 vessels a year
but their ideas came to nothing. Nero
announced his plans for a canal in 67AD
and indeed he went on to cut the first sod
with a golden shovel. More than 6,000
slaves and prisoners of war dug a twomile-long ditch before Nero had to
return to Rome, and the unfinished canal
fell into oblivion.
Herod of Atticus, the Byzantines and
the Venetians also had a go, but it was not
until the late 19th century that the present canal was built. Construction began
in 1882 and was completed in 1893 by
finally destroyed in 146 BC by Roman
general Lucius Mummius. We have Julius
Caesar to thank for the rebuilding of
Corinth in 44 BC, after which the new
city flourished once more as the capital
of the Roman province of Achaea.
Modern Corinth was founded in 1858
after an earthquake destroyed the old city.
Today, it is an important transport hub
and export centre for local fruit, raisins
and tobacco, but it has the atmosphere of
a sunny market town of ancient pedigree.
Extensive historical sites include the
substantial Roman remains of the ‘agora’
(marketplace) flanked by an enormous
portico dating back to the fourth century
BC. Seven doric columns, the hilltop
ruins of the Temple of Apollo dating back
to 550 BC, dominate the citadel. And
there are the remains of other temples,
villas, a theatre, fountains, shops, public
baths, potteries, a gymnasium and a triumphal arch. St Paul lived and preached
for two years in the city, where he wrote
his letters to the Corinthians.
In the foothills of the Gerania mountains, not far from the isthmus but still in
the prefecture of Corinthia, is the small
town of Loutraki, famous for its hot
springs that are claimed to have healing
properties. There are other hot springs,
called the Baths of Helene, at Loutros
Elenis, a resort with splendid beaches.
Near the Perahora peninsula and its
bay are the ruins of the temples of Hera
Akraia and Limenia. Visitors can view
one of the most important pan-Hellenic
shrines – the seventh century BC sanctuary of Poseidon at Isthmia, near the village of Kiravrisi which staged the
pan-Hellenic games every two years. ■
Railways back on track
❑ Travelling by train in Greece is set to
be a real treat in the next few years, as
millions of dollars are being poured into
new tracks, tunnels and rolling stock.
For decades, state-owned Hellenic
Railways (OSE) languished in relative
neglect as investments were made in
shipping services to the Greek islands,
propelled by the burgeoning tourism
trade. Another factor that has held back
rail development is the difficult terrain
across much of the mainland.
Now, with the Olympics just over two
years away, the railways are receiving
some overdue attention. Several
projects are under way, costing some
$13 billion – half from European
Community Support Framework funds.
Ergose, the construction subsidiary
of OSE, is tendering for schemes worth
$793 million this year. A major project
is an upgraded, electrified rail link from
Patra in the west to Athens and then
on to Greece’s second-biggest city,
Thessaloniki, 400 miles to the north.
The line, due to open in 2008, will halve
the present five-and-a-half-hour journey
time between Athens and Thessaloniki.
Parts of the route have already been
upgraded. At other points, particularly
near Thermopylae, 100 miles north of
Athens, trains must slow down as the
track winds its way through some
spectacularly craggy scenery. Tourists
will be encouraged to discover some of
these stunning areas of the mainland
barely known to foreign visitors.
Ergose managing director Christos
Tsitouras says: “Our high-speed
network is going to give everyone the
opportunity to visit the periphery of
Greece in a fast and convenient way.
This did not happen in the past.
The train was considered slow,
old-fashioned and noisy. The new
railway routes will change people’s lives
in the same way that the Athens Metro
changed the lives of Athenians.”
A planned regional light railway will
stretch from Thebes, 70 miles north of
Athens, to Cape Sounion, 50 miles to
the southeast. It will pass through
industrial Eleusis and a line will
continue to Corinth.
The drive is on to complete a rail
link, budgeted at $76.5 million, to the
new Athens international airport at
Spata in time for the Olympics – and to
meet the commitments for the mass
transit project made to the International
Olympic Committee. Mr Tsitouris says
the long-envisioned suburban line will
be electrified from Rendi, a Piraeus
industrial district, to the airport.
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World Report
GREECE 19
21/2/02
5:02 pm
Page 20
The Olympics is the focal
point for much of the current
wave of infrastructural
development, but the benefits
will be felt for generations
PAPADAKIS INVESTMENT GROUP
Race is o
INTERNATIONAL INVESTMENT WORLD CO.
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FINANCING
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he Athens 2004 Olympic Games
is an important catalyst for
infrastructural development in
Greece, not only in terms of the
facilities required to host them but also
the new roads and transport services
required to cope with the millions of
expected visitors.
The new Athens international airport
at Spata, which opened in March 2001, is
now the symbolic gateway to 21st century
Greece that greets visitors on their arrival.
The city’s new Metro is another showcase
of the new era.
George Ganotis, secretary general at
the Ministry of Environment, zoning and
public works, says that while the
Olympics is a focal point for much of the
current wave of development, it is the
legacy it leaves behind that will have the
most significant impact on ordinary
Athenians. “The city will have a totally
new image,” he says.
The Metro, new trams, roads, railways,
airport and the development of new land
around Athens will transform the city into
an ultra-modern, cosmopolitan hub. The
unique historical flavour of the Greek
capital, with the Acropolis towering over
the sprawling urban centre, will make it
a city like no other in the world, says
Mr Ganotis.
“The Olympics was the perfect occasion for the improvement of the quality
of life in Athens and we are now developing this further,” he says, adding that
Athenians have long deserved a life free
from the fume-filled and congested city
centre of yesteryear.
But this work is just the tip of the
iceberg, with other major infrastructural
projects under way across the country. In
particular, a series of ambitious highway
schemes will eventually connect Greece
with its neighbours, boosting regional
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‘Complex mix of typical
commercial and difficult
geo-technical aspects’
integration and strengthening communications between southeastern Europe
and the rest of the continent.
The Egnatia Highway, stretching
680km from Igoumenitsa on Greece’s
Ionian coast to the frontier with Turkey,
is the first motorway to slice across the
country from east to west. The highway
GREECE
ATHENS 24, PONTOU ST., 115 28, P.O. BOX 140 88, 11510 ATHENS GREECE
TEL: 30-1-779 5444, FAX: 30-1 771 7190-1-2, TELEX: 225609 PAPS GR
E-MAIL: [email protected], [email protected]
USA
1329 CONNECTICUT AVE., WASHINGTON D.C. 20036, 1801- UNITRUST BUILDING
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Photo: Athens 2004
FOR MORE INFORMATION:
Warm welcome: the new airport at Spata is the symbolic gateway to 21st century Greece
21/2/02
5:04 pm
Page 21
INFRASTRUCTURE
o n to boost connections by 2004
lenges as many settlements with prehistoric, Roman and Byzantine origins have
been discovered during construction.
Sometimes new discoveries have led to
design modifications so as not to damage
important historical sites. In one case,
the length of a tunnel was extended by
more than a mile to preserve the acoustic
and visual aspects of an amphitheatre.
“It is a complex mixture of typical
commercial aspects and difficult geotechnical, cultural and symbolic aspects,
because of the fact that for the first time
a big project like this is going through
that region,” adds Mr Fatouros.
Another major project is the Pathe
Highway; a 730km road linking Patras to
Athens, Thessaloniki and Evzoni on the
border with Bulgaria. This north-south
Photo: Egnatia Odos
Boosting regional
integration and
communications
Roman route: the Egnatia Highway, stretching 680km from Igoumenitsa on the Ionian coast to Turkey, is Greece’s first east-west motorway
is named after Roman pro-consul Gaius
Ignatius, who was the first to conceive
and build a road from the Ionian Sea to
Turkey, which enabled Roman commerce
to spread further east.
Funded jointly by the European Union
and Greek government, this huge project
will have a massive impact on the lives of
the people of northern Greece; slashing
travel times and opening up new possibilities for tourists and commerce. The
journey from the port of Igoumenitsa to
the Turkish border, for example, will be
cut from 13 hours to just five.
much of it is already open to traffic.
The Egnatia Highway will open up the
Balkan market and serve the hinterlands
between Eastern Europe and the Black
Sea. It will form an integral part of the
Trans-European Highway network, and
eventually it will be possible to drive
from the Channel Tunnel in France to
Istanbul without leaving the motorway.
As well as the complex financial
arrangements for the project, the highway faces enormous technical hurdles in
crossing mountainous terrain, along with
serious environmental and cultural chal-
Egnatia will connect more than 300
villages and communities, provide direct
access to 19 cities, 10 industrial areas,
five ports and six airports, and open up a
scenic region barely known to foreign
tourists. Such is the significance of the
highway that the Turkish authorities are
preparing to extend it to Istanbul.
Dimitris Fatouros, chairman of Egnatia
Odos, the state-owned company set up
to manage the project, believes the highway has huge international importance.
It is scheduled for completion in time
for the start of the Olympics, although
artery, costing around $1.72 billion, is
being funded by the EU, which seeks to
further strengthen communication links
within the region.
In a sweeping arc through the western
suburbs of Athens, the city centre and
out to the new airport at Spata, a new
ringroad is under construction. Begun in
1998, the first phase, linking the city to
the airport, was completed last year.
A mixture of European, state and private financing is funding the $1.4 billion
scheme and Attiki Odos is the 11-member
private consortium of local companies
chosen to build it.
Attiki Odos general manager Dimitris
Papamichail says the Pathe project symbolises what is happening today across
the country. “The local people are very
happy to welcome this new high level of
service. There are now wide, fast roads
of good quality. The Greeks could not
have imagined that they would get such
a high quality service.” ■
Whatever your need, Asprofos is at your service
Photo: Athens 2004
Asprofos is southeastern Europe’s largest engineering group.
Cosmopolitan hub: the Metro is being upgraded, along with new trams and rail links
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· Process Studies and Basic Design
· Detailed Engineering
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and Supervision
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284 El. Venizelou St., GR-176 75, Kallithea, Athens, Greece. Tel: (3010) 94 91 600
Fax: (3010) 94 91 610, E-mail: [email protected], Website: www.asprofos.gr
World Report
GREECE 21
22/2/02
2:46 pm
Page 22
PORTS
Piraeus gets
shipshape for
privatisation
he port of Piraeus has been the
departure point for adventurous
Greek seafarers for centuries, and
as Greece comprises myriad islands
attracting many holidaymakers, the port’s
efficient functioning is vital.
Merchant marine minister George
Anomeritis acknowledges the different
views and interests between the government, ferry operators and shipowners,
but he has vowed that last summer’s
problems of overcrowding and delays
will not be repeated this year.
The last details of the privatisation of
Piraeus port are being ironed out. Unlike
the vigorous port of Thessaloniki in the
north, which was listed last year, the
transformation of Greece’s biggest port
from state-controlled giant into dynamic
private enterprise has been stalled, largely
by union opposition.
Piraeus Port Authority (PPA) has been
restructured as a corporation and is
working more efficiently, but now there
is an added incentive to move things
T
along even more swiftly – the forthcoming
Athens Olympic Games in 2004.
Late last year, PPA president Constantine
Maniatopoulos announced plans to float
about 12 per cent of Piraeus’s stock. The
authority will consider issuing new shares
to raise money for further development
at the port. Unofficial estimates put the
target of the float at $32 million.
Local institutions EFG Eurobank and
the Agricultural Bank of Greece have
been selected as the underwriters of the
deal, while Bank of America, which has
handled the studies into Piraeus’s privatisation, will act as consultant.
A possible purchaser for the stock is
the municipality of Piraeus, which says it
wants to take a significant stake in the
authority to ensure its voice is heard. The
civic authorities have made clear in the
past that they have not benefited from as
large a slice of the revenues generated by
the port as they would have liked.
Mr Anomeritis says Piraeus is to hold
an initial public offering (IPO) for entry
Photo: Piraeus Port Authority
The aim is to transform Greece’s biggest port into a dynamic
private enterprise as it gears up for an initial public offering
Efficiency first: the authority is banking on the port’s potential as a regional hub, given its connections to
into the Athens Stock Exchange’s main
market. Available will be 6.375 million
government shares, representing 25.50
per cent of the company’s share capital,
each one of two euros ($1.732). Also on
sale to port authority employees are
303,000 stocks at 20 per cent less than
the price to be set in the IPO.
The pill that the PPA will present to
investors has been significantly sweetened by a new 10-year deal with its major
customer, the Mediterranean Shipping
Company, which uses Piraeus as a
regional hub. Under the new agreement,
the port can look forward to at least
300,000 teu (tonne equivalent units) per
year from the Geneva-based shipping
company, up from 200,000 teu under the
old agreement.
Piraeus handled more than one million
teu for the first time in 2000, and last
year’s total was running at a similar level,
with the PPA budgeting for a turnover of
about $109 million.
The authority is banking on the port’s
potential as a regional hub – something
that clearly is not beyond the bounds of
possibility, given its connections to the
Greek islands and, indeed, the rest of the
world. But, as many visitors to the country will have experienced, the port can be
chaotic at times and in many respects it
does not match the efficiency of modern
ports in Western Europe.
Mr Maniatopoulos says European
Union directives will require alterations
MANIATOPOULOS
‘We are very competitive
in that we offer low
transshipment costs’
at Piraeus. “These changes will affect the
structure of the business and the way that
ports will compete and survive in a completely different market. In Greece, we
have a number of different problems
which have to be dealt with in parallel.
“The major change we have observed
these last few years is the altered legal
status for major ports, starting with
Piraeus. We have to face the difficulties
related to becoming a company, instead
of an authority.”
Mr Maniatopoulos says container
traffic has been increasing dramatically,
not only for the domestic market but also
for transshipments to the Black Sea and
other eastern European ports. “We offer
low transshipment costs and are very
competitive, but the situation in the local
market is also very competitive.”
The PPA is planning several investment
projects, including a third pier for container handling. Land available for container operations will be increased and
new cranes purchased, and it is hoped
that the new facilities will be commissioned before the end of 2003.
25/2/02
4:07 PM
Page 23
SHIPPING
ns to the Greek islands, and indeed the rest of the world
“One activity that is growing in importance is the transshipment of vehicles. We
are going to build a new terminal for the
transshipment of cars, which will give us
extra capacity in two years’ time. I am
rather optimistic that ship repair activities
could be increased in the coming years as
well,” says Mr Maniatopoulos.
The authority is working on a project
that will link the port’s container terminal to the Greek rail network, enabling it
to act as a gateway for countries such as
Hellenic is the first
Greek company
to be sold to a
foreign consortium
Albania and the former Yugoslavia. This
will be a lengthy civil-engineering project
and it is unlikely to be completed earlier
than 2005.
A further step in the modernisation of
Greek shipping services was taken late
last year when the government sold
Hellenic Shipyards, the country’s largest,
to a consortium made up of Germany’s
Howaldtswerke Deutsche Werft and
Ferrostal. It was the first privatisation of
a national Greek company to a consortium of foreign investors. ■
❑ Greece has reduced its tonnage tax
in a long-awaited move to restore some
competitiveness to its national ship
register. A package of measures passed
by parliament will slash the direct levy
on Greek flagged vessels by 70 per
cent. Officers will be taxed on this
year’s income at six per cent and lower
ranks just three per cent.
Minister of merchant marine George
Anomeritis says: “Our strategic targets
are to strengthen merchant marine
competitiveness, to deregulate the
passenger shipping sector, to promote
safety in shipping, to protect the sea
environment and to support seamen.
A strong shipping industry is closely
linked to a strong Greek economy.”
The Greek flag will remain Europe’s
most expensive, partly due to the
obligation to employ EU officers, but
Mr Anomeritis aims to bring it more in
line with competitors without sinking to
the levels of “flags of convenience”.
Greece has a long history in the
industry and its shipowners own nearly
a fifth of the total tonnage of the
world’s merchant fleet. This long
tradition was founded to a great extent
on the willingness of banks to offer
loans to buy ships, but today’s owners
are seeking other ways of financing
their fleets. Shipping is a cyclical
business – a high risk for banks – and
the number of willing lenders has
halved during the past five years.
Greek shipping firms might well
take a leaf out of the book of Stelios
Haji-Ioannou, the founder of low-cost
airline EasyJet, now that the millionaire
Greek is pioneering new methods of
building up a shipping fleet.
Mr Haji-Ioannou took a fresh
approach when he founded Athensbased Stelmar Shipping. Few Greek
shipping companies are big enough to
qualify for listing on the New York
Stock Exchange, but Stelmar achieved
this in March 2001.
That Mr Haji-Ioannou came from a
shipping background has certainly
been a help – his father owned the
biggest independent fleet in the world
– but like any enterprising young man,
he wanted to go it alone. Stelmar
Shipping was born in 1992.
The company bought its first oil
tanker a year later and over the next
eight years the fleet was expanded to
11 ships. Stelmar chairman Peter
Goodfellow says that by the end of this
year, the fleet will number 27 vessels.
Stelmar’s strategy has been to
provide shareholders with “significant
earnings visibility”. The company has
built a substantial book of forward
business for its crude and oil-product
tanker fleet over the next few years.
“We have positioned the company
for further growth in the generally
more stable product-tanker sector. We
Photo: Piraeus Port Authority
Shipowners who are fleets ahead
Flag up: parliament is slashing the direct levy on Greek flagged vessels by 70 per cent
are pleased with the success that we
have had in securing significant
time-charter coverage for both 2002
and 2003,” adds Mr Goodfellow.
Stelmar has charters this year
equivalent to $100 million in revenue,
or 61 per cent of the net available
days of its fleet. For 2003, Stelmar
has locked in almost $65 million in
revenue and almost 39 per cent of the
net operating days of its fleet.
“Stelmar’s charter strategy is to
achieve a growing revenue stream
regardless of tanker market
conditions,” says Mr Goodfellow.
Forward charters, he says, provide
shareholders with significant earnings
visibility for the years concerned.
GOODFELLOW
‘Stelmar is actively
looking for other
opportunities’
GYFTAKIS
‘By having good ships
we earn the trust of
the charterers’
“We don’t want to be part of this
gamble that is the cyclical nature of
shipping. In addition to time charter
revenue already secured, each
$1,000-a-day of revenue generated by
each vessel trading under spot voyages
throughout 2002 will contribute
30 cents per share,” he adds.
In the present world economic
climate, the spot market could prove
to be more volatile. Mr Goodfellow
adds that Stelmar is “actively looking
for other opportunities” and is
considering mergers and acquisitions.
Another Greek who has built up his
own shipping fleet is Mediterranean
Maritime president George Gyftakis,
who bought his first vessel in 1980.
He says: “The old Greek shipowners
taught us that the way we should
manage ships is through traditions. I
believe in having very well-maintained
ships, which have a good resale value.
By having good ships we earn the trust
of the charterers.”
Shipping was always a complex
business, from maximising the use of
a vessel – and its eventual disposal
and replacement – to searching for
new customers. “It has now become a
science,” says Mr Gyftakis. “The only
thing we have left from the old days is
the tradition of being a shipowner.
“The Greeks are the only people
who know how to operate ships at
quite a big percentage lower than the
operating costs of other shipowners in
the world. So we are much more
competitive than others.”
Mr Gyftakis rapidly expanded his
fleet, buying eight ships – all bulk
carriers – in the late 1990s following a
deal with Bank of Scotland. “Bankers
have generally had bad experiences
with shipowners, with many bad loans,
and they still feel distrustful of
shipowners,” he says.
“But they should not judge all
shipowners in the same way. I have
had a five-year relationship with Bank
of Scotland. We have a fantastic
relationship and the bank is always
there to assist.”
Mr Gyftakis says his medium-term
goal is to expand his fleet to 10 or 12
ships, no more than 10 years old. “My
long-term goal is to build new ships,
but again no more than 10 or 12.”
He remains very much the
traditional, independent Greek
shipowner. “I want full control of my
business. If investors want to invest
in my company, they are welcome,
but they have to accept that the
management’s decision is always final.”
World Report
GREECE 23
21/2/02
5:08 pm
Page 24
WATER
Adding value to a scarce resource
Management of local water supplies is the priority, but this
expertise is also being put to good use in overseas markets
he harsh summer climate has led
to the evolution of a number of
highly specialised and innovative
water companies to guarantee that
Greece does not run dry. The priority is to
manage the country’s water resources, but
the skills and technology that have been
developed are proving valuable abroad.
Since the 1980s, the state-run Athens
Water & Sewage Board (Eydap), one of
the biggest single institutions in Greece,
has provided the Greater Athens region
with its water. It supplies about four
million people, covering the wider area of
Attica, with an annual consumption rate
of 390 million cu metres.
Following a flotation in 1999 that saw
30 per cent of the company sold off to
private investors, Eydap has begun an
ambitious investment programme and set
out its vision to expand into new activities
such as energy and telecoms.
At the end of 2001, Eydap signed its first
foreign deal to help the government of the
former Yugoslav republic of Macedonia
to improve its water supply networks in
three cities. The $258,000 project will
cover Skopje, Koumanovo and Kavadarsi.
T
XENOS
‘As a commodity its
value is huge, but its
price remains very low’
GOING
The move is Eydap’s first venture into
the Balkan market and forms part of its
plans to expand activities across northeastern Europe. Managing director Dr
Dionissios Xenos says the move illustrates
a shift in emphasis for the company.
“A new mentality has been introduced
to the management and employees,” he
says. “Eydap is not only a company with a
public interest but also an enterprise, and
therefore an entrepreneurial mentality is
necessary. This change was hard and took
time, yet it was finally introduced.”
At home, the company is gearing up
for Athens 2004 and will supply water
services to the Olympic village now under
construction. Mr Xenos says the first steps
towards creating a multi-service utility
company have already been taken.
As well as generating electricity from
biogas at its Psyttalia wastewater treatment plant, Eydap is studying the feasibility of installing fibre-optic cables in the
Athens area. He says discussions are under
way with various Greek partners to create
this alternative telecoms network.
Despite plans to diversify and expand,
it is still water – a commodity widely
undervalued – that is expected to form
the basis of any future growth for Eydap.
“One of the most important commodities
of this century will clearly be water.
Its value is huge, but its price remains
very low,” says Mr Xenos.
Another Greek water services company, Eurodrip, which went public in
2000, is also looking to take its expertise
FROM STRENGTH TO STRENGTH
The Port of Piraeus, the Eastern Mediterranean’s
largest, knows its strengths. Recent modernisation
projects have made Piraeus a global contender in
areas including transshipment, container activity,
passenger transfer and cruise facilities.
The Port of Piraeus has all the management
know-how and human capital it takes to make it
the transportation hub of the future.
Piraeus Port Authority S.A
Akti Miaouli 10 185 38 Piraeus, Greece
Tel: (301) 4520911-19
Fax: (301) 4520852 / 4519058
E-mail: [email protected], www.olp.gr
Investment programme: utility giant Eydap has ambitious plans to expand its service portfolio
further afield following a number of
successful forays selling its unique dripirrigation systems. Its products, which
offer significant savings on water and
fertiliser costs for farmers, serve clients in
around 64 countries.
The drip-irrigation systems are mainly
designed for the management of irrigation
and the fertilisation of large areas of land.
Aside from the savings they also help to
protect the environment. The systems are
large, however, and generally cannot be
transported further than 1,000km, hence
the need to set up more production
centres around the world.
The company has production facilities
in the US, Egypt and Turkey, selling across
the North American, Mexican, North
African and Middle Eastern markets.
But Eurodrip chairman Dimitrios
Paraskevopoulos says the firm still has
big ambitions abroad. “We need to enter
new markets; for example, China, South
America, Australia and Brazil. I foresee
that this will be our biggest project over
the next five or 10 years.”
For poor farmers in less developed
states, such as in Africa or India, there
are cheaper solutions available. Eurodrip
is also strengthening its business on the
home front, most recently taking a 68.2
per cent stake in irrigation equipment
distributor Hydroelenchos.
Eurodrip believes that Hydroelenchos’s
infrastructure could well improve its own
chances in bidding for contracts for landscaping and developing green areas ahead
of the 2004 Olympic Games.
Despite being a relatively young company, formed in 1979, Eurodrip has built
up some impressive credentials, including
recognition from the European Union.
“Of the 85 per cent of water used in
agriculture to irrigate crops in every country, our system can save 40-60 per cent,”
says Mr Paraskevopoulos. “This statistic
has been recognised by the EU. They have
included special provisions to subsidise
this system in the third EU support framework to support the Greek economy.”
The company has also developed a
tailored package and turnkey solutions
programme known as Megadrip, alongPARASKEVOPOULOS
‘Governments must find
solutions for agricultural
and urban use’
side Swiss shareholder ASI Global, to
assist major customers.
Mr Paraskevopoulos says the company
is always looking to form new partnerships with big farming corporations such
as Del Monte or large state enterprises
such as those at work in China.
Eurodrip plans to grow through
increased investment in new facilities
and production sites, and through continued expansion into new markets.
“There is huge potential for a company
like Eurodrip throughout the world,
particularly because there are periods of
drought everywhere,” he says. “Water
supplies will diminish and governments
and world institutions must find solutions
for agricultural and urban use.” ■
This supplement was produced by World Report Limited Inc, who are solely responsible for the content

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